Actually since 2008 veterans and military retirees are include with active-duty military in civilian attire who are now authorized to salute the flag while it is raised, lowered or passing whether covered or not. I do. "Men not in uniform", i.e. civilians or those who have never served remove their hat and cover their heart as has always been proper etiquette but sadly seems to seldom be followed.
Rules for Rendering Hand Salute of U.S. Flag - Military Benefits - Military.com